Nothing inspires workers than changes that are geared towards improvement of business processes, in the organization. Most organizations have turned to decentralization as a way of alleviating rigidness, as was common in most organizations in the 1960s and early 1970s. The effectiveness of any organization is measured by amongst other things, cost effectiveness, the time it takes for information to flow between the bottom and up, the level of bureaucracy in an organization, as well as how the organization strategically positions itself to face its competitors as well as profit maximization.
This paper looks at role of decentralization, horizontal coordination delegation as is evidenced by its adoption by many organizations. Ackroyd, [2002. 90-122] defines decentralization as the process in which the organizational structure is designed to have the administrative roles practiced in the lower divisions in the organization. With decentralization comes delegation of duties and responsibilities.
Through delegation authority is transferred to lower levels making subordinates more empowered.Decentralization leads to more learning and talent is best nurtured as subordinates feel appreciated and part of the organization’s decision-making system. The beauty of delegation is that superiors delegate to their juniors only what the subordinates can perform better. Flat organizational structures have slowly replaced the more mechanistic organizational structure that was popular in the pre 1980s. , they are favored because the embrace delegation of duties, quick communication, and decentralization of the decision making process.
The mechanistic or bureaucratic structures have been accused of rigidity, and over-emphasis on hierarchy [Donaldson, 1999]. Organizations that lean towards the mechanistic structure embrace top-down communication and therefore consist of many levels of management something which causes the organization to hire many mangers hence increasing expenditure. The mechanistic management structure is a sharp contrast with the more popular flat structures currently being embraced by most organizations.Largely linked to the Total Quality Management concept associated with Japanese firms, flat structures have been termed as lean and effective [Jaffe, 2001]. There are many advantages associated with flat organizational structures, decentralization and delegation. As flat structures are more likely to de-emphasize hierarchy and formality, they end up saving a lot of time.
Flat structures are very flexible as their key concern here is to achieve excellence, to maximize profits and to achieve competitive advantage. Flat structures recognize the potential in the human resource.Therefore, flat structures embrace participation of all levels of employees. The relationship between employees in the organization is at a personal level as flat structures are based very few management levels. With less levels of management for instance two or three, all employees stand a very high chance of participating in the decision making process. With a flat structure organizations are well suited to face the ever changing and unpredictable business environment.
According to, Clegg, Kornberger, and Pitsis, [2005] flat structures are favoured by organizations due to the fact that they allow for quick response environmental demands.Under flat organizations talent is nurtured and therefore innovativeness is possible. As authority is decentralized, workers are more autonomous and likely to enhance performance [Clegg, Kornberger, & Pitsis, 2005]. According to [Donaldson, 1999] there is no ‘a fit for all’ management structure. Therefore organizations tend to settle for structures that position them in a better way to achieve the organization’s goals and objectives and fits into the business environment. However flat structures have been accused of being time consuming.
Another disadvantage is that workers are put under more than one manager something which can cause conflicts. Such a structure may allow for duplication of roles bringing about confusion. Delegation acts as a motivator and a show of confidence to employees who can participate in the decision making process with little supervision or no supervision at all. However delegation may not be possible in very big organizations or sensitive and key installations such as the military.Decentralization allows the freedom required to respond to market forces. With the advent of information technology, decentralization has become very easy with communication happening faster than ever before.
The role of IT is evident in the way organizations have quickened the decision-making process as organizations adapt suitable systems. While centralization has been accused of depending too much on intuition, vision and charisma of the leaders [Ackroyd, 2002. 90-122], decentralization allows for; empowerment of workers, innovation, leaves room for mergers and joint ventures.Conclusion Evidence points to the fact that; a hybrid of centralized and decentralized management as the most suitable for organizations.
Depending on the activities of the organization, the organizations size and the business environment, management is supposed to look for the best structural design to advance its goals and objectives. From the above discussion it is clear that, decentralization, horizontal coordination and delegation play an important role in the success of businesses therefore there is a need for many organizations to practice decentralization as a form of management.
